Question 2 Read the following case extract and answer ALL questions that follow. A management researcher is compiling a list of practices of managers that he thinks correlate with improved return on shareholders equity. He suspects that the average number of peer-reviewed articles read weekly by the Chief Executive Officer (CEO) of a JSE-listed company could predict the return on shareholders equity (ROE, measured in %). To test the veracity of his suspicion, he e-mailed a validated questionnaire to 200 CEOs of JSE-listed companies and received back 127 questionnaires of which 120 were usable (see Table 2.1, below). Table 2.1, below, is an excerpt of the data gathered from the 120 CEOs. Each row in the table shows the number of peerreviewed articles read weekly by CEO and the return on shareholders equity of the JSE-listed companies of which the CEO is the leader. Table 2.1: Excerpt of data gathered from 120 CEOs of JSE-listed firms. Respondents # Average number of peer-reviewed articles read weekly by CEO Return on Shareholders equity (ROE, in %) 1 4 12,50 2 1 10,42 3 5 18,00 4 6 22,75 5 8 27,16 6 3 17,85 7 2 9,21 8 7 31,08 9 1 6,62 10 3 12,22 11 5 14,08 12 3 9,50 13 4 12,26 14 4 16,50 15 5 18,64 120 6 19,55 With the help of a data analyst, the CEO conducted the analysis of the data using IBM SPSS Statistics version 25 and the following output was generated: Table 2.2: Test of Normality of ROE Tests of Normality Kolmogorov-Smirnova Shapiro-Wilk Statistic df Sig. Statistic df Sig. ROE .098 120 .200 .973 120 .167 a. Lilliefors Significance Correction Table 2.3: Correlation of Average Number of Articles Read ROE Correlations Average number of articles read ROE Average number of articles read Pearson Correlation 1.000 .799 ** Sig. (2-tailed) .000 N 120 120 ROE Pearson Correlation .799** 1.000 Sig. (2-tailed) .000 N 120 120 **. Correlation is significant at the 0.05 level (2-tailed). Table 2.4: Regression Model Summary of Average Number of Articles ROE Model Summary b Model R R Square Adjusted R Square Std. Error of the Estimate 1 .799a .638 .624 6.992 a. Predictors: (Constant), Average number of articles read b. Dependent Variable: ROE Table 2.5: Results of ANOVA for the Average Number of Articles Read ROE model ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 1089.416 1 1089.416 153.919 .000 b Residual 835.185 118 7.0778 Total 1924.601 119 a. Dependent Variable: ROE b. Predictors: (Constant), Average number of articles read Table 2.6: Regression Coefficients for the Average Number of Articles Read ROE Model Coefficientsa Model Unstandardized Coefficients Standardized Coefficients B Std. Error Beta t Sig. 1 (Constant) 3.525 1.897 1.935 .041 Average number of articles read 2.498 0.453 .799 6.528 .000 a. Dependent Variable: ROE REQUIRED: 2.1 State the aim of the study. (2 marks) 2.2 Identify the Independent (IV) and dependent (DV) variables implicit in the study. (2 marks) 2.3 Formulate the null and alternative hypotheses for the study. (2 marks) Based on the output, comment on the strength, direction and significance of the correlation between the independent and dependent variables. Please quote the relevant statistic to substantiate your answer. 2.4 (6 marks) On the basis of the regression output and using the standard reporting format, comment on the relationship between Average number of articles read and ROE. 2.5 (6 marks) 2.6 State the regression equation of the Average number of articles ROE model. (2 marks)